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I'm thinking about forming a single-member LLC (in the US), but I've never done convertible debt notes (bonds) before, so I don't know what impact that would have on my business structure. Is there any benefit or difference in doing an LLC versus something like a C-corp when it comes to issuing convertible notes?

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If you are going to be issuing debt like that and having shares I think a C corp is probably easiest, but I am not an accountant or an attorney, so this might be useless advice. My S corp has a convertible note - but it would have been better I think if we could have issued different classes of stock and had a C corp. – TimJ♦ Sep 11 '10 at 14:31

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I believe this is more a business question than a legal question.

From the legal perspective, there is not a huge difference between converting to shares of a corporation vs. converting to LLC units or membership interests.

The business difference is that many investors insist on investing in corporations rather than LLCs.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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